Cleveland Elec. Illuminating Co. v. Public Utilities Commission

• Decision Date: 05 May 1976
• Docket Number: 75-741,Nos. 75-740,s. 75-740
• Citation: 75 O.O.2d 172,346 N.E.2d 778,46 Ohio St.2d 105
• Parties: , 75 O.O.2d 172 The CLEVELAND ELECTRIC ILLUMINATING CO., Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio, Appellee. (Two cases.)
• Court: Ohio Supreme Court

Page 105

46 Ohio St.2d 105

346 N.E.2d 778, 75 O.O.2d 172

The CLEVELAND ELECTRIC ILLUMINATING CO., Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio, Appellee. (Two cases.)

Nos. 75-740, 75-741.

Supreme Court of Ohio.

May 5, 1976.

The Supreme Court, 40 Ohio St.2d 403, 330 N.E.2d 1, affirmed in part and reversed in part and remanded an order of Public Utilities Commission authorizing a rate increase for an electric utility. On remand, the Commission found that rate schedules in effect prior to the order reversed on appeal were reinstated by operation of law and subsequently allowed utility to file new rate schedules, and appeal was taken as of right. The Supreme Court, Stern, J., held that in an appeal from an order of the PUC the authority to remand is a necessary concomitant of Supreme Court's jurisdiction to reverse, vacate, or modify and that when the Court reverses and remands an order establishing a revised rate schedule for a public utility the reversal does not reinstate the rates in effect before the order or replace that rate schedule as a matter of law but, rather, is a mandate to the Commission to issue a new order and, hence, that the rate schedule filed with the Commission remains in effect until the Commission executes the mandate by an appropriate order.

Syllabus by the Court

1. In an appeal from an order of the Public Utilities Commission, the authority to remand the cause to the commission is a necessary concomitant of this court's jurisdiction to reverse, vacate, or modify. (R.C. 4903.13 construed.)

2. When this court reverses and remands an order of the Public Utilities Commission establishing a revised rate schedule for a public utility, the reversal does not reinstate the rates in effect before the commission's order or replace that rate schedule as a matter of law, but is a mandate to the commission to issue a new order, and the rate schedule filed with the commission remains in effect until the commission executes this court's mandate by an appropriate order. (Gene Slagle, Inc. v. Pub. Util. Comm., 41 Ohio St.2d 44, 322 N.E.2d 640, overruled.)

The Cleveland Electric Illuminating Company, the appellant, is a public utility providing electric service in northeastern Ohio. On October 7, 1971, appellant applied to the Public Utilities Commission of Ohio for an increase in electric service rates. After hearings on the application, the commission, on November 28, 1973, issued an opinion and order authorizing an increase in rates, and thereafter approved revised rate schedules filed by the appellant in conformity with that order. The order was the subject of three appeals to this court, one by the appellant and two by intervening appellants. All three appeals were decided by this court, on June 11, 1975, in Cleveland Elec. Illuminating Co. v. Pub. Util. Comm., 42 Ohio St.2d 403, 330 N.E.2d 1, a decision which affirmed in part and reversed in part the November 28, 1973, order and remanded the cause to the commission for further proceedings in accordance with the opinion. The over-all effect of the decision was to agree with the utility that it was entitled to rates higher than those granted by the commission in its order.

The utility immediately filed with the commission an application for authority to refile its existing rate schedule, and on June 13, 1975, the commission issed an order authorizing the refiling of the existing schedule.

On June 16, 1975, the commission on its own motion found that the entry of June 13, 1975, was improper, as in conflict with this court's decision in Gene Slagle, Inc., v. Pub. Util. Comm. (1975), 41 Ohio St.2d 44, 322 N.E.2d 640. The commission found that the June 13th entry should be held to be of no effect, and that those rates in effect prior to the November 28, 1973 order were reinstated by operation of law. Thereafter, on June 17, the appellant filed a motion for clarification in this court, requesting a directive that this court's prior decision did not have the effect of reinstating the earlier rate schedule by operation of law, or in the alternative, requesting a stay order pending the decision of the commission on remand. The commission joined in the motion for clarification. On June 20, the appellant made a supplemental motion for a stay of the order of June 16.

On the same day, June 20, this court granted a temporary stay of the June 16 order. Thereafter, on June 24, we overruled the motion for clarification and extended the stay of the June 16 order of the commission, pending a decision of the commission on remand. The opinion and order of the commission on remand, allowing the appellant to file new rate schedules, was rendered on July 3.

The appellant filed timely appeals from the commission's June 16 order, and the cause is now before this court as a matter of right.

Squire, Sanders & Dempsey, John Lansdale, Alan P. Buchmann, Richard A. Miller and Alan D. Wright, Cleveland, for appellant.

William J. Brown, Atty. Gen., Charles S. Rawlings and Cheryl K. Hachman, Columbus, for appellee.

STERN, Justice.

In Gene Slagle, Inc., v. Pub. Util. Comm., supra, at page 46, 322 N.E.2d 640, 641, it was held that when an order of the commission changing utility rates has been reversed by this court for failing to adequately set forth the reasons prompting the decision, 'the increased rates pursuant to such order could no longer be lawfully charged, and those rates in effect prior to the above order were reinstated by operation of law, and continued in effect until further order of the commission.' The utility raises two issues in this case: whether Slagle applies to this court's decision in Cleveland Elec. Illuminating Co. v. Pub. Util. Comm. (1975), 42 Ohio St.2d 403, 330 N.E.2d 1, and whether Slagle was erroneous and should be overruled. Since the utility raises substantial questions as to the correctness of Slagle itself, we find it appropriate to begin our consideration with that issue.

I.

The difficulty presented in this case and in Slagle is that the statutory plan for public utility regulation set out in Title 49 of the Revised Code does not specifically prescribe the immediate effect upon existing rates of this court's reversal of a commission order revising rates; nor do the statutes prescribe a particular procedure to be followed.

The process of public utility rate-making in Ohio is wholly controlled by statute. Any public utility desiring to establish a rate or to to change an existing rate must file a written application with the commission. R.C. 4909.18. The duty of the commission is to determine the justness and reasonableness of the proposed rates, based upon the valuation of the utility's property, giving due regard to relevant factors such as the necessity for making reservations for surplus, depreciation and contingencies, and such other matters as are proper according to the facts of each case. R.C. 4909.15.

The process of rate-making frequently involves extensive hearings, voluminous testimony, and the determination of difficult and abstruse technical questions which must be resolved on the basis of complex and often disputed evidence. The function of the commission is to carry through this process, in accordance with the statutory plan, and to fix lawful and reasonable rates based upon the evidence presented.

The function and jurisdiction of this court in an appeal from an order of the commission is limited. Under R.C. 4903.13, our task is to affirm an order of the commission if it is not unreasonable or unlawful. This court has often emphasized the limited nature of that authority. ¹

Our function is not to weight the evidence or to choose between alternative, fairly debatable rate structures. That would be to interfere with the jurisdiction and competence of the commission and to assume powers which this court is not suited to exercise. '* * * The members of this court are neither accountants nor engineers, and manifestly it would be unfair to the litigatns and to the commission for the court to pretend that it is in a position to better evaluate the evidence and determine the difficult question of the reasonableness of the order than is the commission.' Dayton v. Pub. Util. Comm. (1962), 174 Ohio St. 160, 162, 187 N.E.2d 150, 151. Our task is not to set rates; it is only to assure that the rates are not unlawful or unreasonable, and that the rate-making process itself is lawfully carried out.

In large measure, the purpose of the decision in Slagle was to affirm the limited nature of this court's jurisdiction in these types of cases. Our decision was that this court's reversal of a commission order rendered that order of no further legal effect. Upon a literal reading of the duties of this court under R.C. 4903.13, that decision is a logical result, for the statute directs that the order be 'reversed, vacated or modified' if found to be unreasonable or unlawful.

The order which this court reversed in General Telephone Co. v. Pub. Util. Comm. (1972), 30 Ohio St.2d 271, 285 N.E.2d 34, and which was later at issue in Slagle, was an order which was defective because the commission had failed to carry out its statutory duty to provide adequate findings of fact and conclusions of law. This court could not modify the order without indulging in extensive examination of the record and improper speculation as to the actual basis for the decisions made by the commission, nor could this court determine that the order was based upon the evidence. Upon a literal reading of R.C. 4903.13, it would appear that this court might only reverse or vacate the order, in the sense of ending the order's legal effect, while leaving any subsequent proceedings for remedying defects in the order to the judgment of the commission.

In fact, however, upon further reflection and examination of Ohio's statutory plan for public utility regulation, and of the principles upon which this court's jurisidction is based, we are now convinced that our...